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As part of Ald. Michael Rodriguez’s proposal, the funds would be provided as forgivable loans, while applicants would have to live in Chicago, inside the home they are seeking the loan for and have incomes at or less than 300% of the federal poverty guidelines, among other requirements.
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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Taking out loans to pay, not for capital expenditures, but for current expenses is an old Amtrak business plan. What happens next year when people can’t afford the insane property taxes? Another loan?
It didn’t work then,and won’t work now.
Putting people in debt (and especially if they cannot afford to service those debts) doesn’t work. I remember 2008 as if it were yesterday. Loans without rigorous credit standards and underwriting create more misery than good. The elephant in the room is the high property taxes, and they look like they will only go higher in coming years. Lending into this situation is supposed to help? I don’t see it.
Hmm, this sounds like an advanced class in can kicking!